Kampala — The minister for Microfinance, Mr Kyeyune Haruna Kasolo, has warned microfinance institutions to stop cheating the general public by charging very high interest rates on loans.

Over the past two decades, institutions that make micro-loans to low-income borrowers in Uganda, developing and transition economies alike have focused increasingly on making their operations financially sustainable by charging interest rates that are high enough to cover all their costs. This, in the process, has hurt their borrowers as they cannot expand the enterprises they borrowed for.

Addressing members of Association of Microfinance Institutions of Uganda (AMFIU) at their head office in Najjanankumbi last week about new the law in place which regulates the tier four microfinance institutions (MFIs), Mr Kasolo said MFIs are cheating people and they must stop it.

“Some of you have opted to cheat your own clients by charging high interest rates. Besides the high interest rates, there are other charges the microfinance institutions are charging their clients,” he said.